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TMI Blog2004 (6) TMI 627X X X X Extracts X X X X X X X X Extracts X X X X ..... m. E/982/97-Mum (Department's appeal) E/CO-307/97-Mum. The dispute relates to the admissibility of Modvat Credit under Rule 57Q. The inputs involved are: i. Cement ii. Iron & Steel & Structure iii. Construction equipment's,Drilling machines, welding equipment's, electrode & parts & grinding wheels. iv. Fire extinguisher, base frame, timer v. Work shoptools, CR, steel strips, PVC label vi. Electrical tools vii. Laminated sheet viii. Magnetic ramming mass ix. High alumina refractory cement x. Electric wires, cables and electrical goods and xi. EOT cranes. 2. During March 95 to June 95, M/s. Llyods Steel Industries (herein after referred to as "assessee") had taken credit on the above mentioned goods among others, which according to the department did not satisfy the definition of Capital Goods as they were not used in producing or processing of any goods or to bring about any change in any substance for the manufacture of final products. It was also noticed that the assessee has also taken credits on the goods not declared under Rule 57T and also goods which were received prior to 16-3-95. Accordingly 4 show cause notices were issued to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns we hold that the credit is admissible on cement and iron and steel structure. (b) Modvat Credit on Drilling machines, welding electrodes, grinding wheels etc., has been denied by the commissioner on the ground that these items are used in the maintenance workshop for minor repairs and upkeep of the capital goods and have no role to play even indirectly in the process of manufacture. Shri Vipin Jain has contended that in earlier cases the modvat credit on these items has been allowed and places reliance on the following decisions : (i) Bajaj Auto Vs. CCE - 1999 (109) ELT 210 (ii) CCE Vs. Bhushan Steel & strips - 1998 (101) ELT 422 (iii) CCE Vs. Saurabh Metals (P) Ltd. - 2000 (36) RLT 197 (CEGAT)=2000 (116) ELT 56 (T) (iv) Rathi Udyog Ltd. Vs. CCE Meerut - 2000 (38) RLT 551 (CEGAT-LB)=RLT (LB-CEGAT)-1652=2000 (121) ELT 524 (T-LB) As regards to Modvat Credits on Grinding Wheel is concerned, we agree with Shri Vipin Jain. It is admissible under Rule 57Q as held by the tribunal in Bhushan Steel and Strips case cited supra or under Rule 57A as held by the tribunal in this case to Bajaj Auto, Saurabh Metal and Rathi Udyog cited Supra. Following the ratio of these decisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he furnace for fixing Components within a furnace such as Refractory Bricks etc. the bricks are required to be fixed in proper place for which cement and ramming mass is required without which furnace will remain incapable of carrying out the function. He relied on the following decisions in support of his contention and submitted that credit is admissible on these items : (i) Kalyani Steel Ltd. Vs. CCE - 1998 (99) ELT 620 (ii) Century Cement Ltd. Vs. CCE - 1998 (24) RLT 75 (CEGAT)=1997 (95) ELT 655 (iii) CCE Vs. Saurabh Metal (P) Ltd. - 2000 (116) ELT 56 (T) We agree with Shri Jain and following the ratio of these decisions, we hold that modvat credit is admissible on these items. 4. Modvat credit on Electric wires, Cables and Electrical goods and EOT Cranes has been allowed by the Commissioner which is being challenged by the Revenue. (a) In regard to modvat on Electrical goods, wires, cables etc., commissioner after a visit to the assessee's unit found that the assessee has availed credit on those items to the extent of their usage in the production unit. In his order, commissioner has stated that the assessee has not taken credit on wires or cables used in office ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the appellants. (b) Others which are not disputed in this appeal. (xii) Electric insulating and fitting, electrical transformer and electric wires as cables (xii) Material handling equipment. During March, 1994 to June, 1994 the assessee has taken credit on the above mentioned goods. The Commissioner disallowed credit in regard to item from Sl. No. (i) to (xi) and allowed credit in respect of (xii) and (xiii) above. Both assessee and the Revenue are in appeal. 8. (a) Credit on cement, iron and steel structure is admissible as discussed in para 3 (a) hereinabove. For the same reason, credit on conbestra, a chemical used in the foundation of machines is also admissible. (b) Credit on transfer car for scrap has been denied on the ground that it does not play any role in the manufacture of final product. Following the ratio of the decisions in the case of Sterlite Industries. Nova Udyog, Rathi Ispat cited supra we hold that credit on these items is admissible. (c) Credit on air pollution equipment has been denied on the ground that the goods can be manufactured without installation of air pollution control equipment and therefore the equipment is not capital goods. 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